BOCOM International has released a research report maintaining a "Buy" rating on XPENG-W (09868), while trimming its target price to HK$76.7. The adjustment reflects weaker-than-expected growth in 3Q26 and a delayed earnings inflection timeline, leading to a downward revision of 2026 revenue forecasts and a reduced target valuation of 1.5 times the 2026 price-to-sales ratio.
The firm has lowered its 2026-28 vehicle delivery projections from 518,000/649,000/728,000 units to 455,000/555,000/650,000 units, with corresponding revenue estimates cut to RMB 90.7 billion, RMB 113.4 billion, and RMB 135.4 billion. The company's 3Q26 revenue guidance of RMB 21.7-23.4 billion comes in roughly 15% below consensus expectations, with the inflection point for automotive profitability likely postponed to 4Q26.
BOCOM International's key insights are as follows: In 2Q26, overall gross margin demonstrated resilience, though automotive profit improvement lagged the blended margin performance. Revenue for the quarter reached RMB 19.74 billion, up 8.0% year-over-year and 51.5% quarter-over-quarter, with deliveries of 103,300 vehicles. The implied average selling price based on automotive sales revenue was approximately RMB 165,000, down 5.9% quarter-over-quarter but up 0.9% year-over-year. Total gross margin stood at 20.7%, expanding 3.4 percentage points year-over-year, yet automotive gross margin was only 12.1%, down 2.2 percentage points year-over-year and flat sequentially. High-margin technology R&D services provided notable support to overall margins.
R&D and sales, general, and administrative expenses were RMB 2.91 billion and RMB 2.50 billion respectively, up 32.1% and 15.2% year-over-year, with SG&A expenses rising 32.5% quarter-over-quarter, driven mainly by increased franchise store commissions and marketing investments. The net loss attributable to shareholders in 2Q26 was RMB 1.34 billion, exceeding the firm's expectations.
The 3Q26 guidance fell short of forecasts, pushing the earnings inflection point to 4Q26 while the commercialization of Physical AI begins initial validation. The company's 3Q26 revenue guidance of RMB 21.7-23.4 billion, with a midpoint of RMB 22.55 billion, is roughly 15% below market consensus. Growth in 4Q26 will depend primarily on volume ramps from the September launch of the G9L, the 4Q MONA L05, and overseas deliveries of the L03. Management targets monthly deliveries exceeding 60,000 units in 4Q26 and quarterly overseas deliveries surpassing 40,000 units.
Meanwhile, the robotics business has just completed a funding round exceeding US$900 million, with a post-investment valuation of over US$6.3 billion, led by IDG with participation from Gaorong, along with strategic investments from Tencent and Alibaba. The IRON is planned for mass production by the end of 2026, with external deliveries commencing in 2027. The Robotaxi has completed over 2,000 internal test orders in Guangzhou, targeting driverless passenger operations by 2027.
Key risks include weaker-than-expected H2 deliveries and new model ramps, intensifying price competition, lower overseas deliveries, and slower-than-anticipated commercialization of the Physical AI business.
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